Prudential w-p fund advice

transltr

Due to the financial climate at the moment I am thinking of surrendering my Prudential With-Profits fund , the only thing that is holding me back is that the Pru are looking into the possibility of a reattribution of the inherited estate of the sub-fund , I am loathe to miss out on this possibility as I have had this policy for a number of years....opinions please , should I stay or should I go

sheslookinhot

I am interested in comment from the viewers on this one. I have a Prudential "Homebuilder" for 18 years, 7 to go. The last few statements have been positive and due to the length of time I have been paying in (£720pa x 18) I reckoned on leaving it. I don't need the money and monthly payment is unnoticeable. It was to clear my mortgage, but I have switched to repayment. I would be open to other views. i.e cash-in and invest.

dunstonh

Due to the financial climate at the moment I am thinking of surrendering my Prudential With-Profits fund

Why? Have you actually checked your valuations in the last few days?

They have one of the best with profits funds running and Pru are one of only two with profits funds that I have not actively moved people out of and their investments have been performing really well. Probably as they are not too heavy in the stockmarket and have been quite successful in timing when to realise a profit and rebalance the portfolio.

transltr

dunstonh
Thanks for the reply, have been in touch with the Pru re valuation & was pleasantly suprised that it has not dipped.
Just got a little jittery I guess.

baby_boomer

Pru is well placed compared to almost all the rest. I've still kept a WP investment with them.

Re the "inherited estate". Aviva have just walked away from talks on distributing their inherited estate with the government appointed regulator (Claire Spottiswood) as they haven't been able to make progress from principles (what policyholders & shareholders are entitled to) to detail. And the company is paying Ms Spottiswood's £250K salary.

Old_Slaphead

I've been really impressed with the WP element of my Prudential PPP in the last 2-3 of years. It's performed much better than my average equity based investment (ie last year it was up over 10%). I've no currrent thoughts to transfer out to at the moment as it's providing some stability in these volatile times.

Fargon

Dunstonh

I've read a lot of your posts regarding Pension Transfers. I was made redundant recently and have about 7 various pensions (don't think any are guaranteed final salary). They are a mix of employee schemes over the years, inc Std Life, Scottish Mutual and the dreaded Equ Life (this fund was frozen/restricted and, along with another 2 schemes that subsequent funds were paid into by our trustees, are winding up due to company buyouts).

Thinking of consolidating some (or all) into a Prudential WP fund and doing some research to pre-empt/check out advice that my current advisor may give once he has the transfer values.

On Moneyfacts.com 'Best With profits', the Pru WP (UWP) shows a good return, but I have seen posts from you from a while back that UWP is not necessarily that good an option. Is the Pru With Profits Pension that you mention in this post the UWP flavour or just the Unit Linked version (the tables showed the Pru Unit Linked returned £12,165 on a £1k pa premium over 10 years, while the UWP returned £15,400.

I'm 51 and hoping to find work to bring in some form of income, but also not interested in volatile markets in case I do need to look at cashing my pension in next 5-10 years. I would guess at total pension transfer value being around the £60k mark - not enough to make it worthwhile considering an annuity at this point obviously...!!

dunstonh

Thinking of consolidating some (or all) into a Prudential WP fund and doing some research to pre-empt/check out advice that my current advisor may give once he has the transfer values.

Consolidation can make sense and can be cheaper. However, I'm not sure I would want to transfer into a Pru personal pension. Pru are not really active in that field and although they have a product, its more of an after thought.

On Moneyfacts.com 'Best With profits', the Pru WP (UWP) shows a good return, but I have seen posts from you from a while back that UWP is not necessarily that good an option. Is the Pru With Profits Pension that you mention in this post the UWP flavour or just the Unit Linked version (the tables showed the Pru Unit Linked returned £12,165 on a £1k pa premium over 10 years, while the UWP returned £15,400.

Forget tables showing returns on with profits funds. They are extremely misleading. You have to consider future potential and going forward its really only Norwich Union and Pru that have a viable with profits fund.

Unit linked funds cannot be used to compare funds between providers as you could find the default fund (which many of these comparison sites use) is rubbish but the focused funds are higher quality (or vice versa).

Some personal pensions have over 1000 funds nowadays so picking one fund to compare is not the way to do it.

'm 51 and hoping to find work to bring in some form of income, but also not interested in volatile markets in case I do need to look at cashing my pension in next 5-10 years. I would guess at total pension transfer value being around the £60k mark - not enough to make it worthwhile considering an annuity at this point obviously...!!

If you are looking at earlier retirement then annuity purchase may not be the best option. Income drawdown may be. In which case you could be invested still for another 24 years. It is however right that you should stick within your risk profile but I personally wouldnt go for a with profits fund but go for a spread of unit linked funds which average out to match your risk profile.

Fargon

Thanks Dunstonh

The FA I'm speaking to at the moment and who is gathering my transfer values, is with Edward Jones (I've since read a lot of postings about them....).

They are 'whole of market' and do not offer a flat fee. I've asked several times whether his commission for setting up a Personal Pension and transferring funds would ultimately come out of my funds, but he says they would not. I'm assuming that they would come directly from the Pension provider, but will need clarification from him.

He originally mentioned Pru or L&G as potential pension providers, although I don't know yet whether these are Unit-linked, with profits etc (he did mention SIPPS as well, but I'm not going down that route).

Any other general advice would be welcome to avoid making a bad decision now and regretting it for a long time. Also, any questions I should be asking, working on the basis that a lot of people won't tell you the bad points if you don't ask....

dunstonh

They are 'whole of market' and do not offer a flat fee. I've asked several times whether his commission for setting up a Personal Pension and transferring funds would ultimately come out of my funds, but he says they would not. I'm assuming that they would come directly from the Pension provider, but will need clarification from him.

If he uses a conventional pension provider then you wont have an initial charge but will have the cost of advice factored into the annual management charge. It can be cheaper with pensions to be on fee basis as you get tax relief on the fee and the annual management charge will be lower. However, you typically need a term of 15-20 years to retirement for that option to be cheaper.

Obviously, Edward Jones are a whole of market salesforce and I am always wary of salesforces (regardless of status). From next year under current FSA proposals their reps wont be able to call themselves advisers but insurance agents or sales reps and they wont have an advice process but a sales process. They do typically take maximum commission each time as well.

He originally mentioned Pru or L&G as potential pension providers, although I don't know yet whether these are Unit-linked, with profits etc (he did mention SIPPS as well, but I'm not going down that route).

L&G is cheap but offers nothing special. Pru I have mentioned. SIPPs are overrated and oversold.

Any other general advice would be welcome to avoid making a bad decision now and regretting it for a long time.

Pensions are a just a tax wrapper for investments. Treat the pension as an investment and focus on the quality of the investment. This may mean you dont get the cheapest but its better to pay 0.1-0.2% a year more for quality than less for rubbish. Note the cost differences of 0.x% p.a. are minimal compared to daily movements in investment values. For example the FTSE is up over 1% today alone (at time of posting).

Fargon

Much obliged for the comprehensive response and I hear what you are saying re quality investments. Unfortunately as a Pensions ignoramus, I have to rely on an FA to tell me what is/isn't quality.

Have you any pointers to good, solid performers in relation to the area I am looking at?

Alternatively, are there any websites that would give good (unbiased) advice in layman's terms, so that I can swat up before my next meeting - fore-warned is fore-armed...!